Head of Commodity Strategy
Summary: The Commitments of Traders reports highlight speculators positions and changes made during the week to September 22 in FX, bonds and stocks. A week were a worsening risk appetite helped send the dollar higher and global stocks lower. Surprisingly the broad dollar rally did not attract an expected wave of short-covering from speculators holding an elevated short. Instead they chose to sell into the rally thereby increasing long positions in EUR, CHF and JPY.
Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.
This summary highlights futures positions and changes made by speculators in forex, bonds and stocks up until last Tuesday, September 22. A week were risk sentiment received a setback after stock markets worldwide tumbled in response to a worsening pandemic, the U.S. Congress struggling to deliver more stimulus, U.S.-China tensions and an upcoming and most likely contentious U.S. election. In response to these developments, the S&P 500 dropped by 2.5%, the dollar index reached a two-month high while steady bond yields disguised a drop in breakeven (inflation expectations) and rising real yields.
During the week to September 22 the dollar rallied against all but one of the ten IMM currency futures tracked in this report. The Dollar index traded higher by 1% while the Mexican peso and Brazilian real both took a +3% hit. In response to this and perhaps somewhat surprising, speculators instead of reducing short dollar bets chose to increase it by 9% to $34.9 billion. Most of the Greenback selling occurred against the euro followed by Japanese yen and the Swiss franc while only the Canadian dollar and Russian Ruble saw net selling.
In the euro, speculators added fresh long positions as the EURUSD dropped towards €1.1700. As a result the net long jumped by 12,246 lots to 190,822 lots or €23.9 billion, just 10% below the recent record.
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Commodity Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Head of Commodity Strategy
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)